The aim of this review is to examine the evidence on the role of antidiabetic agents in patients with type 2 diabetes mellitus (T2DM) and non-alcoholic fatty liver disease (NAFLD). In particular, metformin does not seem to have significant effects on liver histology. Glitazones improve steatosis and necro-inflammation, delay progression of fibrosis, and ameliorate glucose and lipid metabolism and subclinical inflammation. However, there is now evidence that prolonged treatment with these agents may offer no additional histological benefit and that metabolic improvement does not necessarily parallel histological improvement. Moreover, the long-term safety and efficacy of glitazones is an issue of continuing concern. Injectable glucagon-like peptide 1 (GLP-1) agonists and dipeptidyl peptidase 4 (DPP-4) inhibitors are more recent antidiabetic agents with some promising preliminary resulst in NFLD. However, experience with their use is still very limited. In conclusion, no antidiabetic agent has hitherto been shown to exert a beneficial effect on hepatic fibrosis. However, pharmacological treatment could be considered in patients with non-alcoholic steatohepatitis (NASH) not responding to lifestyle intervention. Finally, larger long-term studies are needed to shed more light on the effect of antidiabetic treatment on NAFLD.